The next big thing in action figures is "interaction figures." That's the pitch we heard today during a showcase event in New York City for a revival of the video game hero Spyro the Dragon as part of a band of toys that interact with video games.

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Spyro will be one of at least 30 toys — colorful, small statues, really — that each contain a microchip that stores the progress players make with those characters in a related video game. A new Spyro toy will be sold as a level one character, but playing Spyro in this fall's Wii game Skylanders: Spyro's Adventure will start leveling him up, adding powers as he rises from rank 1 to 10.

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It helps to see this in action.

The toy version of Spyro connects to the Wii game by being placed on a plastic disc called a portal. (See the video atop this post.) The portal reads the chip in the statue so that the Wii game can render a Spyro who has the right character levels. Putting someone else's Spyro toy on the portal would render a Spyro in the video game who is at that toy's level.

This isn't a Spyro game, though. It's a game featuring line of toys featuring a line of characters. Removing the Spyro toy from the portal and putting a different Skylanders toy on it pulls Spyro from the game and replace him with the properly-leveled version of the new toy. Each colorful Skylander character has different powers in the game. Playing as one or the other will trigger changes in the game level's terrain. A player can finish the Skylander game with any one toy, but the company behind this game, Call of Duty publisher Activision, would prefer that players collect them all.

Here's an example of one of the characters... a guy called Trigger Happy. His rap sheet:

Bio: Trigger Happy is more than his name, it's his solution to every problem. Nobody knows from where he came. He just showed up one day blasting gold coins everywhere with his custom‐crafted shooters. Now everyone throughout the lands knows of this crazy goldslinger that will take down any bad guy… usually without bothering to aim.

This is kid's stuff, of course. We were warned before attending that the game might be for younger people than the typical Kotaku reader. You can decide that. But as we heard more details it was obvious that this Skylanders concept could be expanded. Even if it isn't, there are some strong influences from everything from Lego Star Wars to World of Warcraft that make this more interesting that it might appear at a glance. There's drop-in co-op that works if two kids each put a toy on the portal. There's character leveling, though it is accelerated (a kid can hit the level cap in a few hours), and there's even an option for player-vs-player combat.

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Paul Reiche, creative director at Toys for Bob, the game studio behind the concept, explained to Kotaku that the Skylanders figures will be aligned to one of several elements, with certain character types — dragons, for example — represented in each class. Collecting and using more of the same element or type will add powers to the other toy characters of that same group. The portal and the game can track this, he explained, by automatically associating the toy with the portal to which it is first connected (for that reason, a child wouldn't be able to cheat by having their friends' toys pose as their own.)

The toys were all colorful if a bit fragile-looking, well-sculpted and full of character. The video game looks like a conventional 3D action game, the type of colorful action game that would be familiar to fans of many kids character-driven games. We were shown how different characters would tackle the same obstacle. For example, a lava character could slowly lumber his way up a ram outside a castle, oozing lava onto enemies. A swifter aquatic character could douse enemies atop the ramp from afar with a water cannon.

The Skylanders toys can also be made to connect with more than just the Wii, which Activision made clear from the get-go. Executives said they want to put the game on multiple platforms. A 3DS version, for example, is also in development and will connect to the same toys. The intention is for a single toy to be connected to multiple games and to always carry the player's stats to that toy.

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We were promised more details as the fall release gets closer. For now, check out the video here to see how this works.

The rest of the Skylanders shown today...

SpyroElement: MagicPrimary Attack: Fire BreathSecondary Attack: Horn ChargeUpgrades include:
- Flight
- Spread Fire
- Aerial Head BashBio: Spyro hails from a rare line of magical purple dragons that come from a faraway land few have ever traveled. He has been on many exciting adventures, and has a remarkable knowledge of the different lands he protects, more so than any other Skylander. A strong‐willed dragon who is young at heart, Spyro is fearless and brave. A true hero dedicated to defending his world from all things evil.

IgnitorElement: FirePrimary Attack: Flaming SwordSecondary Attack: Fire SpiritUpgrades include:
- Blue Flame Fury
- Fire Flourish- Armor Leap
Bio: On his first quest as a knight, Ignitor was tricked by a cunning witch into wearing a magical suit of armor that he was told would resist fire from a dragon. As it turned out, it was made of cursed steel. He journeyed to a dragon's lair where a single blast of fire transformed him into a blazing spirit, binding him to the suit of armor for eternity. Despite this setback, Ignitor remains a spirited knight who is always fired up to protect the lands from evil and find the witch that tricked him.

EruptorElement: Fire
Primary Attack: Lava LobSecondary Attack: EruptionUpgrades include:
- Magma Bombs
- Volcanic Eruption
- Lava FlowBio: Eruptor is a force of nature, hailing from a species that lived deep in the underground until a volcano launched their entire civilization onto the crust. He's a hot head with a strong dislike for anything evil, so whenever something bad threatens his world, he quickly erupts… quite literally. To help control his temper, he likes to relax in lava pools, particularly because there are no crowds.

Gill GruntElement: WaterPrimary Attack: Harpoon GunSecondary Attack: Water CannonUpgrades include:
- Triple Harpoon Shot
- Water Jet Pack
- Water LauncherBio: For many years Gill Grunt peacefully lived deep in the oceans until a nasty band of pirates kidnapped his Mermaid girlfriend. He then took to land and sea to search for her, eventually joining the Skylanders to help defend the world from every kind of foe… but especially pirates. Gill Grunt is one fish that never lets evil off the hook.